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Buried in latest 10-Q is an admission that the company is having a little disagreement with the French taxman. While no one is on record as detailing how much the sum at issue is the informed gossip is that it's in the €500 million to €1 billion range. True, it's not a life changing amount for a company of Google's size but it's still large enough to hurt, even for a company of Google's size. The basic point at issue is the same one that's been dogging European Union discussions of the taxation of the tech giants (this applies to Amazon, , and all the rest as well, even if they've not received tax demands. Amazon has, the others not as yet): just what is the definition of a permanent establishment?

In March 2014, we received a tax assessment from the French tax authorities. We believe an adequate provision has been made and it is more likely than not that our tax position will be sustained. However, it is reasonably possible that resolution with the French tax authorities could result in an adjustment to our tax position.

The point at issue is that Google sells all of its advertising into France from Ireland. That's absolutely legal, there's no doubt about it, the company is positively encouraged to do this under the EU Single Market rules. For all companies are encouraged to treat the EU as that single market and sell across all 28 countries from only one base. Which is just what Google is doing.

However, there are any number of politicians who think differently. That sales into a country should be taxed, for profit and corporation tax purposes, the same way as sales made within a country. The international tax system just doesn't work this way but some wish it would. And the way to tell whether a transaction is taxable inside a country or not is to work out whether the company undertaking the sale has a "permanent establishment" in that country or not.

This isn't the same as just having an office there: a permanent establishment, while it can be tricky to define in detail, is an office in that country that the business is being conducted through. Google obviously has an office in France. They employ researchers there, translators and so on. But that's not enough for those advertising sales to be taxable in France. For that, the actual business of selling the advertising would have to be taking place in France, through Google's office in France. And this is the bit that is under dispute. The tax office is insisting that employees in France are actually selling advertising while Google is saying that no, all advertising contracts are run from Ireland.

And on that dispute hangs that possible half a billion tax bill.

All of this is generally known and has been a subject of discussion for some time. As it is at the other tech majors concerning their European operations. The only surprise is that the French taxman now seems confident enough to actually pursue Google over this. And if it turns out that Google have indeed been selling advertising from within France then corporation tax will be due. But I find it hard to believe that they've been doing something as silly as that and therefore assume, but don't know, that they'll not have to stump up more cash to Le Fisc.